The decline in the trade union membership rate accelerated through the 1990s. Institutional factors and changes in the composition of the workforce have each contributed to this decline.

Trade union statisticsData presented in this review have been sourced from the Survey of Employee Earnings, Benefits and Trade Union Membership, which was last conducted in August 1999 as a supplement to the Monthly Population Survey. Information about the trade union membership of employees was first collected by the ABS as a supplement to the Monthly Population Survey in November 1976. It was collected biennially in its current format from 1986 to 1992, and has since been collected annually (with limited data available every second year). For more information about this survey see Employee Earnings, Benefits and Trade Union Membership (ABS cat. no. 6310.0).A trade union is an organisation consisting predominantly of employees. The principal activities of a trade union include the negotiation of rates of pay and conditions of employment for its members.

A trade union member is an employee with membership in a trade union relating to their current job.

The trade union membership rate is the proportion of a specified group of employees who are trade union members.

In 1999, 26% of all employees (1.9 million people) were members of a trade union. Levels of trade union membership have dropped considerably over recent decades, especially through the 1990s. In 1976, close to half (51%) of all employees were members of a trade union. By 1992 the membership rate had fallen to 40%. After a slowdown in the decline around the early 1990s (possibly associated with the 1990-91 recession), membership rates have plummeted.

The trend has occurred for both men and women, although over time the membership rates of men and women have converged. In 1999, the membership rate of men was 28% compared to 23% for women (a difference of about 5 percentage points). In 1976, the difference between the membership rates of men (56%) and women (43%) had been greater at 13 percentage points. Clearly, in the last quarter of the 20th century, trade unions have been losing members and/or recruiting only a small proportion of employees entering the workforce.

TRADE UNION MEMBERSHIP RATES, 1976 to 1999(a)

(a) Data prior to 1986 are not strictly comparable with 1986 and subsequent data because of minor differences in definitions.

Catalysts for changeVarious factors have been identified as possibly contributing to the decline in union membership. One factor has been the changes that have occurred in the composition of the labour force. Job growth has been greater in segments of the labour force (such as service industries and in part-time casual jobs) which have hitherto had relatively low levels of union membership. A previous study looking at trade union membership between 1986 and 1992 estimated that at least 30% of the decline in trade union membership over the period was because of such compositional factors (see Australian Social Trends 1994, Trends in trade union membership).

The amalgamation of unions that took place in the 1990s may have also hastened the decline in union membership. The number of separate unions fell from 295 in June 1990 to 132 in June 1996, the date of the last union census.1 It has been suggested that the larger unions that have been created from this amalgamation process may be less responsive to workplace level issues and to individual member input. As a consequence, the benefits of union membership may seem less valuable to individual workers.2,3

Another likely factor linked to the most recent decline is the nature of changes to the legislative framework for industrial relations made in the last decade. Since 1990, and the introduction of the Accord Mark VI between the Federal Government and the Australian Council of Trade Unions (ACTU), there has been a move towards enterprise bargaining. This has been paralleled by a shift away from centralised wage negotiations where unions have played a large role in the past.4

The most recent changes, introduced through the Workplace Relations Act 1996, reduced the matters that could be covered by federal awards, and also provided for individual Australian Workplace Agreements (AWAs) and collective agreements (Certified Agreements, or CAs) between employers and employees at particular workplaces. Other changes included revised provisions for unions' right of entry to workplaces, restrictions on industrial action, and the banning of discriminatory action against non-unionists (removal of 'closed shops' or compulsory unionism) and unionists.5,6

These institutional changes may have contributed to a perception amongst workers that the role of trade unions has become less relevant and less effective. If so, the propensity to maintain membership of a trade union for existing members, or to join a trade union for new entrants to the labour force, would decrease. This would then be a factor contributing to declining trade union membership rates over the period to 1999.

History of trade unions in AustraliaTrade unions have been active in Australia from the second half of the nineteenth century.7 Representative bodies of employees have been a recognised component of Australian industrial relations since the establishment in 1904 of a formal arbitration system to settle industrial disputes.8

In 1912 the first survey of trade unions found that there were 408 separate unions in the Commonwealth of Australia, with around 430,000 members. It was then estimated that 44% of male employees and 8% of female employees aged 20 years and over were union members.9

By 1925 membership rates had increased to 58% for men and 34% for women. In the post-war years overall rates were around 60% in the 1950s and around 55% in the 1960s.10

Demographic changesBetween 1992 and 1999, the proportion of trade union members who were women increased from 39% to 41%. The proportion of members who were aged 35 years or older increased from 56% to 64%. These changes are generally consistent with the changing demographic profile of the labour force (more women and fewer younger people - seeAustralian Social Trends 2000, Work: National summary tables). However, they have also been affected by changes in membership rates among employees. Thus, between 1992 and 1999, membership rates declined at a slower rate among women than men (33% and 36% respectively) and among older employees (falling by about 30% for those aged 45 years and over) than employees in younger age groups (over 40%).

Change within industriesTrade union membership rates have always varied between industries. In 1999, they ranged from a low of 5% in the agriculture, forestry and fishing industry to a high of 50% in the electricity, gas and water supply industry.All industries experienced substantial declines in membership rates between 1992 and 1999. Relative declines in rates were greatest among industries that already had low union membership rates. Those in which union membership rates halved, or more than halved, included agriculture, forestry and fishing, accommodation, cafes and restaurants, and property and business services. Each of these had had union membership rates of less than 25% in 1992.Despite the greater declines in rates for industries with low union membership rates, many of the industries with high membership rates in 1992 experienced some of the largest absolute (percentage point) declines in membership rates. One consequence of the changes observed among the most highly unionised industries was that by 1999 unionists represented no more than one half of employees in any industry. The extent of trade union coverage had been markedly different in 1992 when there were six industries in which unionists had represented a clear majority of employees in their industry.

Industries with high union membership also tended to be industries with below average growth in employee numbers. Of the eight industries with the highest union membership rates in 1992, five experienced net job losses between 1992 and 1999 and two others had below average employee growth over that period. The industries that experienced above average growth in employee numbers, on the other hand, tended to be ones with below average union membership rates.Membership rates declined more quickly between 1992 and 1999 in the private sector (by 33%) than the public sector (25%). As a result the public sector remained much more unionised than the private sector in 1999 (50% and 20% respectively).

Job tenure and union affiliationIndustries with comparatively low rates of union membership in 1999 tended to also be industries in which rates of casual employment were relatively high. For example, of employees in the agriculture, forestry and fishing industry, where just 5% were unionists, almost half (49%) were employed on a casual basis (see Australian Social Trends 2000, Employment arrangements in the late 1990s).

In 1999, only 11% of all casual employees were trade union members, compared to 31% of permanent employees. While membership rates differed between casual and permanent employees, they were much the same among both full-time and part-time permanent employees.

Between 1980 and 1994, union membership rates dropped in many OECD countries, although there are indications that the general rate of decline was slower in the early 1990s than it had been in the 1980s. Like Australia, other OECD countries such as Sweden, New Zealand and the United Kingdom, adopted more decentralised bargaining systems between 1980 and 1994. However, there had not been an OECD-wide uniform movement towards decentralised bargaining during this period. In many countries the degree of centralisation did not change, while in Italy, Norway and Portugal bargaining became more centralised.11

4 Peetz, D. 1997, The Accord, Compulsory Unionism and the Paradigm Shift in Australian Union Membership, Discussion Paper no. 358, The Australian National University Centre for Economic Policy Research, Canberra.

10 Commonwealth Bureau of Census and Statistics, Labour Report, various years, various nos, Commonwealth Bureau of Census and Statistics, Canberra.11 Organisation for Economic Co-operation and Development 1997, 'Economic performance and the structure of collective bargaining', Employment Outlook, July 1997, pp. 63-92.